FUTURE-READY ECONOMY
Initiatives such as the Invest Easy and Invest in Oman portals and the Foreign Capital Investment Law are helping Oman become a leading destination for FDI and prepare for a world without oil.
Similar to other GCC countries, Oman's economy is still heavily dependent on oil revenues, but that is set to change in the not-too-distant future. For some time now, the government has recognized the need to diversify the economy in the face of new economic realities and establish an accommodating investment environment, successfully introducing several measures and initiatives to attract foreign capital and expertise into non-oil and export-oriented sectors such as manufacturing, agriculture, logistics, energy, and tourism.
Located in the southeastern coast of the Arabian Peninsula, the Sultanate is at the center of trade routes connecting Europe, Asia, Africa, and Americas. Accordingly, the government has taken advantage of this strategic geographical location by building outstanding infrastructure, including state-of-the-art airports and ports, industrial estates and technology parks, and free trade zones. A case in point is that of the Port of Salalah, one of the world's biggest deepwater ports. It offers shipping times that are 30-40% shorter than other competing locations, such as 15 days to New York, 12 to the UK, and eight to Singapore.
The government has backed its infrastructure investment with business- and investor-friendly laws. The latest of such laws is the Foreign Capital Investment Law, which went into effect in January 2020. Promulgated by Royal Decree 50/2019, the law encourages FDI by providing several incentives to investors including 100% foreign ownership, reduced capital requirements, competitive lease rates in specific locations, allocation of real estate property for long-term lease, and tax incentives and customs duty exemptions. The law also provides foreign investors with the same rights and benefits as Omani business owners. Foreign investors are particularly attracted by the fact that Oman taxes corporate earnings at 15% and has no personal income or capital gains tax. The government is also willing to offer additional incentives on a case-by-case basis and for certain types of companies established in recognized industrial estates and free trade zones.
Then, there is the government's nationwide digitalization drive, a central pillar of the Oman Vision 2040 and the national diversification strategy. One of the leading digital initiatives taken by the Ministry of Commerce and Industry (MoCI) to streamline the process of setting up a business in Oman is Invest Easy, an online portal that enables businesspeople and investors to get the business procedures done easily in a short time. Its main purpose is to provide citizens, entrepreneurs, and prospective investors with the services and information they need efficiently.
MoCI's Invest Easy portal is complemented by the Public Authority for Investment Promotion and Export Development's (Ithraa) Invest in Oman portal. Talking to TBY, Ithraa's CEO Azzan Al Busaidi described the portal as “a platform dedicated to driving and facilitating investment into the Sultanate, connecting local project owners, investors, and entrepreneurs with the international business community. It is a one-stop shop for browsing, engaging and investing in Oman's most exciting and innovative businesses."
The outcomes of steps and initiatives taken by the government of Oman in recent years have been impressive to say the least. According to the National Centre for Statistics and Information, FDI into Oman soared to USD30.2 billion (OMR11.65 billion) in 2Q2019, up 13.3% from USD26.7 billion (OMR10.29 billion) in 2Q2018. The UK brought in USD14.67 billion of FDI into the Sultanate, followed by the UAE with USD2.96 billion, the US with USD2.32 billion, Kuwait with USD2.16 billion, and China with USD1.26 billion. Other countries that have invested heavily in Oman are Bahrain, India, the Netherlands, and Switzerland. Moreover, Oman ranks 68th in the 2020 Doing Business report by the World Bank, up 10 places YoY.
Oman's ninth Five-Year Development Plan focuses on increasing FDI in the mining, fisheries, manufacturing, tourism, and transport and logistics sectors in order to decrease the direct contribution of oil to GDP from 44% to 26%. And going by the most recent numbers, it is safe to say Oman is doing exceptionally well at preparing itself for a post-oil future.
FUTURE-READY ECONOMY
TABLE OF CONTENTS
Focus: Future foreign policy
Friends to all, enemy to none
In championing the late Sultan Qaboos' non-interference foreign policy, the new ruler of Oman, Sultan Haitham bin Tariq Al Said, is determined to work for friendship and peace, justice and harmony, and coexistence and positive constructive dialogue.
read articleInterview
David Kalife, CEO, Oman Oil Marketing Company (OOMCO)
Despite Oman's fuel market slowing down, OOMCO increased its sales volume of lubricants by 36% in 2019 and is constructing a greenfield bunker terminal at the Port of Duqm. The company has transformed while growing its expertise in Marketing and Digital.
read articleInterview
Azzan Al Busaidi, CEO, Ithraa
Azzan Al Busaidi is an expert in competitiveness and economic growth. He was appointed CEO of Ithraa in 2019 after 17 years spent covering managerial roles in the organization. Al Busaidi was previously Ithraa's director general of planning and studies and is a strong advocate of the potential of digitization. He holds an MBA from the University of Strathclyde and a BSc in Economics from Sultan Qaboos University.
read articleInterview
Qais bin Mohammed Al Yousef, Minister of Commerce, Industry & Investment Promotion & Former Chairman, Oman Chamber of Commerce and Industry
Private Omani companies will be able to benefit greatly from the Fourth Industrial Revolution by enhancing their local value-added strategies and upskilling the workforce.
read articleInterview
Tahir Bin Salim Bin Abdullah Al Amri, Executive President, Central Bank of Oman (CBO)
The Central Bank of Oman's job is to ensure there is adequate liquidity in the system and that banks remain robust and resilient to meet the credit requirements of all segments without undermining financial stability.
read articleB2B
Capital markets
CMA and MSM are supporting Vision 2040 by providing financing to government companies that intend to go public, financing expansion of existing and new IPOs, and widening the investors base in Oman by enhancing and developing the investment funds and insurance industries.
read articleInterview
Khalid Al Balushi, CEO, Khazaen Economic City
International investors and business owners can benefit from Khazaen Economic City's strategic location and its close proximity to the main gateways of the country to import, process, manufacture, distribute locally, and export their goods and services.
read articleFocus: Port 4.0
Destined for greatness
Investments in world-class infrastructure have generated huge rewards for Oman. The goal now is to leverage technology as a disruptive enabler, build human capacity across the public and private logistics sectors, and drive operational efficiencies to build an integrated logistics business environment that is benchmarked against the world's best.
read articleFocus: Gap in tourism services
All bases covered
An amalgamation of local companies and unique experiences in Oman has created an original flavor that is further differentiating Oman's tourism offering from other countries and in the process attracting scores of tourists from all across the world.
read articleB2B
Engineering design
Renardet Engineering Consultants and Design Unit Engineering are recognized experts in their fields. While the former is an international company strongly committed to excellent engineering consultancy services and environmental practices, the latter is an Oman-based team of architects and engineers that incorporates local culture and traditions.
read articleB2B
Construction materials
Oman's construction sector is facing a host of challenges, but Hempel Paints and Al Maha Ceramics are confident that a mix of forward-thinking business models, unique products, and strong government initiatives will help them through turbulent times and generate positive returns in the long run.
read articleInterview
Salim Razvi, CEO, Oman Academic Accreditation Authority (OAAA)
Focusing on higher education institutional accreditation, program accreditation, and the updating and maintaining of the Oman Qualifications Framework, OAAA is helping further advance higher education in the Sultanate.
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